DECISION /FINDINGS ' This complaint alleges maladministration on the part of Lahore Dryport Customs Authority for non-payment of refund of duty amounting to Rs, 72,218 paid by the complainant on a price higher than the actual price of the imported goods. The complainant applied for refund on 1-8-2000 of the amount of duty paid in excess submitting the requisite documents but no refund has been paid. The case may be decided on merit.
2. In reply, the respondents have taken preliminary objection to the jurisdiction of the FTO on the ground that a case involving an assessment matter excludes FTO's jurisdiction in terms of section 9(2)(a) of the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000. It is incorrect to allege that no decision has been taken by the department. An amount of Rs,34,472 on account of customs duty has been approved but kept pending in abeyance due to a huge outstanding amount liable against the complainant who has also filed a writ petition No,9297 of 2003 in the Lahore High Court, which is pending decision. The complaint may be filed.
3. During the hearing the AR reiterated the points made in the written complaint. The DR stated that as per general departmental practice before making payment of refunds it is got verified from the relevant section as to whether or not there exists an outstanding liability against recipients of refunds for possible adjustment of refund against any such liability. The refund payment order was not issued as an amount of Rs, 4,412,195 was pending against the complainant in some other cases. The department had referred the matter for classification ruling to WCO (World Customs Organization), Brussels which has since ruled in favour of the department. Asked whether or not the classification issue has been formally decided and the liability determined and whether or not any notice/demand of duty/taxes has been issued and served on the complainant, the AR stated that the liability has not yet been determined nor the case formally decided nor, for that matter, any notice or demand has yet been served on the complainant because of the pendency of the case before the Lahore High Court. Further asked whether the Writ Petition No, 9297 of 2003 filed in the High Court on 27-6-2003 (cited by the respondents as one of the reasons for holding payment of refunds in abeyance) is connected with the case under complaint the DR confirmed that the subject-matter of the. Aforesaid writ petition was not relevant to the case under complaint. The DR further stated that the department was prepared to make payment of refund involved in the complaint as non-issue of the same had resulted due to confusion on account of mistaken linkage of the case to a pending liability.
4. The arguments of the parties and the record of the case have been considered and examined.
As to respondents' objection to FTO's, jurisdiction it is well-settled now that in order to redress the grievances of the complainant the FTO can take cognizance of and investigate cases involving maladministration otherwise the very purpose of the Establishment of the Office of the Federal Tax Ombudsman Ordinance, 2000 would get defeated. It is observed that an amount of Rs,34,472 on account of customs duty (the amount has been agreed to by the complainant in his rejoinder on record) was approved but its payment kept in abeyance due to an outstanding liability against the complainant and because the complainant has filed a Writ Petition No,9297 of 2003, which the respondents contended was pending in the Court. It is observed that the refund amounting to Rs,34,472, though sanctioned, is being withheld because the department intended to adjust the refund amount against the so-called pending liability, said to be outstanding against the complainant, in terms of the provisions of section 202 of the Customs Act, 1969 and also because the complainant has filed a Writ Petition No, 9297 of 2003 in the Lahore High Court, which is sub judice. The so-called liability has admittedly neither been formally determined/decided nor has any notice or demand been so far issued/ served on the complainant for its payment. Withholding refund on account of a so-called expected but undetermined/undecided tax liability, and for which no notice or demand has yet been served on the complainant, is both premature and arbitrary.
Similarly, it is admitted that the Writ Petition No,9297 of 2003 cited by the respondents is not relevant to the cases under complaint. Respondents failure to pay the amount of refund already sanctioned constitutes maladministration within the meaning of section 2(3)(i)(b) and 2(3)(v) of the Establishment of Office of the Federal Tax Ombudsman Ordinance, 2000. Considering the overall position of the case and DR's submission that the department was prepared to make payment of refund involved in the complaint as non-issue of the same had resulted due to confusion caused on account of mistaken linkage of this case to a pending liability.
5. From the facts of the case and the admitted position it is clear that neither the matter is sub judice nor relates to assessm ent, valuation of goods or determination of liability. It is a 'clear case of arbitrary action to withhold the determined refund on flimsy and baseless grounds which is nothing but harassm ent. This act of the department is neither bona fide nor according to law. Nor against such process any appeal is provided. As maladministration in dealing with the matter is established, the objection to jurisdiction is misconceived. It is recommended that the C.B.R. Direct the concerned Dryport authority to:--
(i) Pay the amount of refund of duty involved in the case without delay.
(ii) Compliance be reported within 30 days.